Over the last year we have made several major advances in understanding how proteolytic remodeling of the basement membrane influences SMG branching morphogenesis and understanding how sulfation patterns on heparan sulfate in the ECM and on the epithelial cell surface influence the biological activity of FGF10.[unreadable] While investigating the role of FGF-regulated proteases in SMG basement membrane remodeling, we discovered that epithelial membrane-type 2 metalloproteinase (MT2-MMP) cleaves collagen IV in the basement membrane. By decreasing MT2-MMP expression, we also reduced epithelial proliferation and branching morphogenesis of both intact SMGs and isolated SMG epithelium. Although the expression of one of the collagen IV chains increased, less NC1 domains, which are proteolytic fragments of collagen IV, were detected by Western blot. Alternatively, exogenous recombinant NC1 domains of collagen IV stimulated epithelial branching and partly rescued the effects of MT2-siRNA on branching. We also determined that the NC1 domains increased MT-MMP gene expression, and this transcriptional upregulation was mediated by alpha 1 and alpha 2 integrins. Our findings show that MT2-MMP cleavage of collagen IV releases NC1 domains, which increase epithelial proliferation via collagen binding-integrin signaling and increased MT-MMP transcription. [unreadable] Heparan sulfate (HS) is essential for FGF activity and functions both as a coreceptor at the cell surface, enhancing FGF/FGFR affinity, and as a storage reservoir of the growth factor within the ECM. We hypothesized that HS chain-specific patterns of sulfation bind and store FGF10 in the ECM. We showed that heparanase, an endoglycosidase, colocalized with perlecan in the SMG basement membrane and in epithelial clefts. We used a number of experimental approaches to show that heparanase releases FGF10 from perlecan HS in the basement membrane, increasing MAPK signaling, epithelial clefting, and lateral branch formation, which results in increased branching morphogenesis. We then used defined heparin libraries to show FGF10 bioactivity is modulated by distinct sulfation patterns. Heparin with 2-O-sulfation and either an N- or 6-O-sulfate induced epithelial end bud expansion, whereas heparin with 6-O-sulfation alone induced duct elongation. Epithelial end bud expansion resulted from increased FGFR1b signaling, with increased FGFR1b, Fgf1, and Spry1, as well as increased Aqp5 expression, a marker of end bud differentiation. Collectively, these findings show that sulfation patterns of HS modulate specific FGF10-mediated events, such as proliferation, duct elongation, end bud expansion, and differentiation, and provide mechanistic insight as to how the developmental localization of specific HS structures in the ECM influences FGF10-mediated morphogenesis and differentiation.[unreadable] We also hypothesized that the location of FGF10-induced proliferation in the epithelium is determined by epithelial HS with specific sulfation patterns. We compared gene expression of all known proteoglycans and HS biosynthetic enzymes between FGF10-treated end bud epithelium and the duct epithelium. Surprisingly, the transcripts for the 3-O-sulfotransferase isoforms (Hs3st1and Hs3st3A1) were increased in the proliferating end bud epithelium, suggesting that the location of 3-O-sulfotransferase gene expression may define the location of FGF10-mediated proliferation. We used in situ analysis to show that the Hs3st enzymes are more abundant in the end bud epithelium. Decreasing Hs3st gene expression using RNAi in FGF10-cultured epithelium decreased proliferation and morphogenesis and gene expression of Fgf1, Fgfr1b, and Fgfr2b. Our data suggest that discrete tissue localization of 3-O-sulfated HS in the SMG epithelium defines the location of FGF10/FGFR2b signaling and influences proliferation and epithelial morphogenesis.[unreadable] In conclusion, our studies on the basic biologic mechanisms that result in branching morphogenesis provide a rationale for a biologically-based therapeutic approach for regeneration of salivary gland tissue. Understanding the cellular processes involved in tissue morphogenesis including proliferation, differentiation, apoptosis, and migration is critical to regenerating tissue.